Apple takes a bite out of Samsung

Nick Scheuer

It sometimes seems tech companies are simply imitating each other’s products.

As it turns out, this may not be so far from the truth.

On Aug. 24, Apple, Inc. won a patent trial against Samsung Electronics Co. and was awarded $1.051 billion in damages. Samsung was found to have copied some key features from Apple’s popular iPod and iPad devices.

Gary Shih at Reuters reports, “The jury deliberated for less than three days before delivering the verdict on seven Apple patent claims and five Samsung patent claims.”

During those three days of deliberation, jurors had to read 100 pages of instructions and analyze 25 hours of argument from each firm.

Apple’s main tactic was to present what it saw as obvious evidence Samsung was copying Apple’s devices over time. This was demonstrated by comparing photographs of each company’s phones over the years and showing private Samsung emails analyzing certain features of Apple’s phones.

Samsung, on the other hand, put forth that Apple’s patents were too broad, and that the firm was claiming ownership of the specific shapes Apple uses in the hardware and software designs of their smartphones. Their lawyers went a step further and argued that Apple’s antics were an attempt to get rid of their competition and, by extension, the choices consumers would have.

The consequences of this verdict are a mixed bag for both companies involved. Apple’s original demand of Samsung paying $2.5 billion in damages was reduced by over half, and the company has demanded that 21 of Samsung’s products be banned from the United States. This ban could potentially cost Samsung billions of dollars in future sales, according to Shih.

However, as of Aug. 28, Forbes reported Samsung’s Galaxy S III, which is on the list of products Apple hopes to ban, has recently been outselling the iPhone 4S.

According to the article, Trip Chowdhry, the managing director at Global Equities Research, found that the vast majority of the stores he looked into were completely sold out of the Galaxy S III, leading Chowdhry to conclude that customers ‘rushed’ to buy Samsung’s flagship phone after the verdict was announced.

Chowdhry concluded that consumers saw they had a limited time frame to buy a Galaxy S III before the potential ban on certain Samsung products may go into effect.

The large lead in sales, plus the extra publicity supplied by the case, may supply Samsung with the boost in sales needed to compensate for their damages payment to Apple. Assuming all of the products Apple wants to ban from the U.S. are approved, the lost sales may not permanently harm Samsung, as the Korean company’s smartphones have already outsold Apple’s by more than 20 million units, according to a different Reuters article.

While this patent case has seen a large amount of publicity due to the rather large amount Samsung must pay Apple in damages, it is by no means an end to the conflicts between the two firms.

The Associated Press reported both companies are legally duking it out over intellectual properties in 10 different nations, and of the cases that have been decided, not all of them went in Apple’s favor.

Also, on Aug. 24, a South Korean court ruled that Apple’s claim of Samsung visually copying the iPhone was unfounded, though the court ruled that each company had violated some of the other’s patents, namely Apple’s use of Samsung’s wireless technology and Samsung’s violation of Apple’s patent on how users are notified of the end to an image gallery.

A German court, however, agreed in part with the U.S. court in July, and ruled that Samsung’s Galaxy Tab 7.7 too closely imitated Apple’s designs, and ordered all European sales to stop. Clearly, there is no unanimous agreement on whether Samsung and Apple’s products are too similar, and it is too early to determine what the effects of the dispute will be over the long term.

In the short term, however, technology companies are already releasing statements about their refusal to abide to Apple’s lawsuit.

Brooke Crothers at reported Cher Wang, chairperson of another mobile device manufacturer, HTC, stated that HTC does not view the lawsuit as an attack on Google’s smartphone operating system, Android, and that “HTC ‘has great skills in innovation and has the confidence to face legal lawsuits with Apple.”

While it is certainly too early to determine if the result of the patent case is intrinsically good or bad for either Apple, Samsung or the industry at large, it will certainly influence the direction of smartphone design for the foreseeable future.


Nick Scheuer can be reached at: [email protected]